Mortgage-servicing company Ocwen Financial Corp. is currently investigating
an error that led to potentially hundreds of thousands of backdated letters
being sent to borrowers. This investigation is in response to a probe
by New York’s superintendent of financial services, who claims that
the company ignored the “pervasive” problem for months after
a whistleblower initially reported the error. Nearly a year later, the
issue is finally being addressed.
The letters were sent to borrowers who were in need of loan modifications
of who were behind on payments. Since the letters were dated when the
company made the decision to write the letter, rather than when it actually
was created, the discrepancy prevented borrowers from being able to promptly
correct any issues with their loans. By the time the backdated letters
were received, it was often too late for them to act within the specified deadline.
While the company claims that many of the letters were backdated only a
few days, many more had significantly longer gaps. Thousands, perhaps
hundreds of thousands, or borrowers who were late on their payments or
under threat of foreclosure received notices from the company too late
for them to attempt to remedy the problem.
So far, it has not been shown that the letter-dating errors resulted in
any foreclosures. Ocwen is working with an independent firm to ensure
that the matter is thoroughly addressed and that all necessary fixes are made.
Read more about this story here.
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